Which of the following statements concerning capital structure theory is NOT CORRECT?

Knowledge Check 01 Feline Watch Company makes wrist watches out of silver metal sheets. Feline sold 200 watches in the month of

anastassius [24]

Answer:

the number of watches to be produced in July is 500

Explanation:

The calculation of the number of watches to be produced in July is given below;

Units Expected to be sale 400

Add: Desired ending inventory 300 (50% of 600)

Total available 700

Less: Beginning Inventory -200

Units to be produced 500

Hence, the number of watches to be produced in July is 500

6 0

2 years ago

Altoon Manufacturing's records were partially destroyed in a flood. The company does not know what sales have been for the year,

Masteriza [31]

Answer:

a. $164,000

Explanation:

The computation of the Altoon Manufacturing's sales for the year until the flood is given below:

= Cash collections + ending receivables - opening receivables

= $158,000 + $25,000 - $19,000

= $164,000

hence, the Altoon Manufacturing's sales for the year until the flood is $164,000

Therefore the first option is correct

7 0

2 years ago

A city government is considering two types of town-dump sanitary systems. Design A requires an initial outlay of $405 comma 00

SIZIF [17.4K]

Answer:

Desing A is a better deal as the equivalent annual cost is lower than desing B

Anywa, bot desing cost are above the city collections thus, it cannot afford the sanitary systems unless it raises taxes

Explanation:

Desing A

F0 405,000

operating and maintenance cost 51,000 for 14 years

Present value of the operating and maintenance cost:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C = $ 51,000.00

time = 14 years

rate = 0.07

$51000 \times \frac{1-(1+0.07)^{-14} }{0.07} = PV\\$

PV $446,018.8673

net worth: $ 851,081.87

equivalent annual cost:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 851,082

time 14

rate 0.07

$851081.87 \div \frac{1-(1+0.07)^{-14} }{0.07} = C\\$

C $ 97,316.904

Desing B

F0 251,000

operating and maintenance cost 89,000 for 14 years

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 89,000.00

time 14

rate 0.07

$89000 \times \frac{1-(1+0.07)^{-14} }{0.07} = PV\\$

PV $778,346.6507

net worth: $ 1,029,346.65

equivalent annual cost:

$1029346.65 \div \frac{1-(1+0.07)^{-14} }{0.07} = C\\$

C $ 117,700.580

5 0

3 years ago

Which of the following practices are not considered essential for a comprehensive JIT implementation: Uniform production (also k

bogdanovich [222]

Answer:

False ( "Large lot sizes" is not considered essential for JIT )

Explanation:

Just in time is an arrangement and alignment of raw material supply with the production process of the business. It minimizes the holding cost, lead time required for delivery of raw material, the setup times and sizes of orders.

The Large lot sizes is not a characteristics of JIT because it may requires the storage facility to place the large orders until used in production which might increase the holding cost.

So, Large Lot Sizes are not considered essential for a comprehensive JIT implementation.

4 0

3 years ago

The fed can increase the federal funds rate by

Stella [2.4K]

The answer is selling Treasury bills, which decreases bank reserves. The government securities that are used in open market processes are Treasury bills, notes or bonds. If the FOMC needs to grow the money supply in the economy it will acquire securities. On the other hand, if the FOMC wants to decrease the money supply, it will vend its securities.

5 0

3 years ago